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The global vertical farming market size stood at USD 2.13 billion in 2018 is projected to reach USD 12.04 billion by 2026, exhibiting a CAGR of 24.8% during the forecast period. Rising concern towards organic food among consumers pertaining to increasing health issues is expected to elevate global vertical farming market. In addition to this, increasing demand for high-quality food, technological advancements in agriculture techniques, and growing urbanization are some of the significant factors impacting global vertical farming industry growth. With the unprecedented growth of world population, the demand for urban agriculture is increasing, shifting our focus to vertical farming.
Vertical farming is a technology used to produce food and medicinal plants in vertically inclined surfaces in unused vertical places such as warehouses, skyscrapers, and shipping containers. Vertical farms aim at growing food in a challenging environment where cultivating land is rare or unavailable such as mountainside towns, deserts and cities. The main goal of vertical farming is to produce more crop per square meter with artificial control of temperature, light, humidity, and gases.
Increasing adoption for vertical farming is mainly attributed to the high demand for environment-friendly production of fruits and vegetables. The fast-growing global population and demand for higher yields on agricultural land are key factors, which in the forecast period will have a positive impact on the vertical farming market. Also, increasing groundwater depletion and rising climatic conditions urged conventional farmers to pursue alternative methods of farming.
Vertical farming has several advantages over conventional farming procedures such as low water consumption, controlled weather conditions, optimised energy usage, reduced post-harvest processing, and extensive crop suitability. Vertical farming eliminates the requirements of heavy machinery and costs associated with the transportation of crops.
Rising concern towards organic food among consumers pertaining to increasing health issues is expected to elevate global vertical farming market. In addition to this, increasing demand for high-quality food, technological advancements in agriculture techniques, and growing urbanization are some of the significant factors impacting global vertical farming industry growth.
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“Growing Need for Independent Farming Technique to Tackle Climatic Conditions to Aid Expansion of the Market”
With a growing population and ongoing developments in global food markets, approaches for more robust methods of crop cultivation need to be brought closer to urban environments. Vertical farming technology has recently emerged as a potential agricultural solution. Vertical farming technology occupies less space as compared to traditional ways of agriculture and eliminates the need for preservatives and chemical substances.
In vertical farming lighting, water and temperature can be optimized to remove climatic risks and enhance production rates. In addition to, this implementation of the controlled environment also decreases the losses from birds and insects that much be factored on conventional farming methods, cutting down the costs associated with harmful pesticides with improved food quality. The vertical farming method also optimizes the level of nutrients crops receive, which will help in environment control.
“Rising Demand for Organic Food is Driving Market Growth”
Today, people worldwide have become more conscious of their food supply and have moved from conventional to organic food without the use of chemicals and pesticides. Rising demand for organic food will be a crucial factor fuelling the vertical farming market growth. Organic farming methods have gained enormous popularity over the past years owing to numerous advantages such as benefits of nutrients, natural and better taste, improving soil quality using organic material, and encouraging biological activity. Organic food cultivated by vertical farming does not contain any chemical that harms humans or the environment; as a result, will keep diseases like cancer and diabetes at bay.
“Hydroponics Segment is Expected to Augment the Vertical Farming Market.”
Based on the vertical farming type, the market is classified into hydroponics, aeroponics, and aquaponics.
The hydroponics segment holds the largest market share in the global vertical farming industry. The growth of this segment is mainly attributable to the ease of operation and low cost of installment followed by minimum utilization of soil & water resources during the process. Hydroponics is a technique of growing plants without soil, where plant roots are immersed, or sprayed with nutrient solution. Hydroponically-grown plants provide higher yields due to proper control over nutrients and eliminating the need for extensive pesticide use. Hydroponics technique offers numerous benefits over the conventional way of cultivation, such as high growth rate, pH control of the solution, climate control, and better use of space and location.
The aeroponics segment of the global vertical farming is expected to be the fastest-growing segment during the forecast period. Aeroponics is a form of agriculture in which plant roots are suspended in the air in an enclosed frame and sprayed with nutrient and water solution. Aeroponics benefits include less consumption of water with increased intake of oxygen and nutrients which enables in growing large quantities of food in the minimum area.
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“Building-based Vertical Farms Segment is Likely to Witness Significant Growth”
Based on the structure, the market is segmented into the building-based vertical farms and shipping-container vertical farms.
Among these, the building-based vertical farm's segment held the largest market share in 2018 and is expected to continue during the forecast period. Building-based vertical farms are implemented in unused buildings and newly constructed multistorey buildings. Factors such as increasing technological advancements in precision farming techniques and lesser cost of installment are expected to drive the demand for building-based vertical farms.
Shipping-container vertical farms are a cheaper option when compared to building based vertical farming. Furthermore, factors such as ease of transportation and less requirement of land are driving the adoption of container-based vertical farming. Market players are installing containers in independent vertical farms, with LED lights, drip irrigation systems, and upright stacked platforms to cultivate a wide range of plants. Shipping-container vertical farming techniques use less water as compared to conventional ways of farming, which has further led the market to grow and gives market players with an opportunity to enter the market.
“Lighting System Segment Accounts for the Largest Market Share”
By component, the vertical farming market has been diversified into the lighting system, irrigation and fertigation system, climate control, sensors, and others.
The lighting system segment is expected to hold the largest share in the global vertical farming market. In vertical farming, the lighting device is an essential component it facilitates faster plant growth. The constant light produced by lighting devices ensures faster and more fertile plant development regardless of the climatic conditions. Players in vertical farming are adopting lighting systems as it is helping them maximize crop yield with minimum power consumption.
The climate control segment is expected to exhibit a high CAGR during the forecast period. Climate control technique regulates lighting, humidity, temperature and nutrient levels to maximize crop yield. Controlled Environment Agriculture (CEA) is a technology-based approach followed in vertical farming which helps in providing security and maintains optimal growing conditions throughout the development of the crop.
The vertical farming market has been analyzed across five major regions, which are North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.
Asia Pacific is expected to dominate the market by covering the maximum revenue share in the market during the forecast period. Asia Pacific vertical farming market is mainly dominated by the increasing use of advanced technology in the fields of vertical farming, growing population, and the growing popularity of organic foods. Furthermore, increasing inclination towards environment-friendly production of fruits and vegetables, climate changes, depletion of groundwater levels would fuel the vertical farming market growth during the forecast period.
Europe is projected to be the fastest-growing region in the global vertical farming market in terms of CAGR. This growth of the region is mainly owing to geographical opportunities for vertical farming. The region aims to supply a large amount of pesticide-free food with less water consumption, as vertical farming consumes less water than the traditional farming method. In addition to this, increasing government initiatives to build vertical farms to overcome the challenge of climate change and rising adoption of artificial intelligence and nanotechnology for farming is expected to propel market growth in the region.
United States vertical farming market would result in the overall growth of North America owing to in the adoption of advanced farming techniques. In addition to this, major companies in the region such as Green Spirit Farms, Aerofarms, American Hydroponics, General Hydroponics, Illumitex, Inc. are developing advanced technologies and launching new products to stay competitive in the global vertical farming market.
North America Vertical Farming Market Size, 2018 (USD Million)
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“Major Vertical Farming Giants Such as AeroFarms, 4D Bios Inc., Green Sense Farms Holdings, Inc. to Focus on Mergers and Acquisitions”
AeroFarms, an agriculture company based in New Jersey is a commercial leader in indoor farming techniques. The company is on an operation to transform agriculture by building and applying environmentally responsible farms and enlarge the production of safe, nutritious, and delicious food.
4D Bios Inc. is a company that provides complete solutions and products for plant factories. The company offers numerous products such as vertical farming solutions, containerized growth systems, home grow boxes, and LED light fixtures. In addition to this, advanced technology such as automatic control, IoT, smart cultivation, efficient power management and high efficacy LEDs help consumers to produce chemical-free and healthy agricultural products.
An Infographic Representation of Vertical Farming Market
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The report offers an elaborative analysis of the market dynamics and competitive landscape. Various key insights provided in the report are macro and microeconomic factors, SWOT analysis, Porter’s five forces analysis, and key vertical farming industry trends, competitive landscape, and company profiles inclusive of recent industry developments such as mergers & acquisitions.
Value (USD Billion)
May 2019 - Thrive Agritech, Inc., a technology company launched Apex LED grow light for high-intensity applications including supplemental greenhouse lighting and source lighting for indoor farming.
February 2017 - Signify Holding. (Philips Lighting) collaborated with Ecobain Gardens to build first commercial vertical farm operation in Canada. Through which, businesses will be able to accelerate growing cycles and grow healthier, more consistent plants. This partnership offers customers attractive returns on investments via healthier, nutritious and rich foods that attract new customers.
As per our (Fortune Business Insights) study, the vertical farming market is predicted to reach USD 12.04 Billion by 2026 with a CAGR of 24.8% (2019 -2026).
As per our study, business owners are more inclined towards vertical farming. Currently (in 2019), the vertical farming market value at USD 2.13 Billion, and it is anticipated to reach USD 12.04 Billion by 2026 at a CAGR of 24.8% during the forecast period (2019 -2026).
Globally, spending on vertical farming is increasing each year. For instance, North America generated a revenue of USD 664.7 Million in 2018 and is expected to create a remarkable revenue share by 2026.
In the vertical farming market, hydroponics and building-based vertical farming are the leading segments. Rising demand for organic food with increasing population has given an unprecedented opportunity for the key players to create enormous investments in vertical farming.
Some of the driving factors for the vertical farming market are a growing need for an independent farming technique to tackle climatic conditions with the increased demand for organic food.
In the vertical farming market, some of the key players are AeroFarms, Green Sense Farms Holdings, Inc., 4D Bios, Inc., Agrilution, AMHYDRO, EVERLIGHT ELECTRONICS CO., LTD. These market players are focusing on agreements, acquisitions, and developments in the vertical farming market.
Asia Pacific is expected to hold the highest market share in the vertical farming market. The region is expected to witness remarkable growth as it houses the major key players in the vertical farming market.
Building-based vertical farming would generate the highest revenue during the forecast period. increasing demand for high-quality food and technological advancements in agriculture techniques would ensure to boost the adoption of vertical farming strategies.
The lighting system component is expected to lead the vertical farming market. Research and development in vertical farming solution would contribute to the market growth.
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